We All Lose When Trump Picks Economic Winners

We All Lose When Trump Picks Economic Winners June 19, 2018

While the rest of the world looks to new and emerging technologies and markets, Donald Trump is focused on a futile effort to revive industries that will soon be part of the past. His picking of economic winners and losers, especially through the use of tariffs, will be a losing bet for the American economy and American workers.

By crafting an industrial policy that largely looks to the past, Mr. Trump differs from his predecessors, who often attempted to hasten the emergence of new industries and position the United States to lead the way.

On energy, both the Barack Obama and George W. Bush administrations enacted tax breaks and federal loan guarantees for emerging technologies like wind power or electric cars that were not initially competitive but, they believed, would eventually become widespread as the world shifted toward cleaner energy.

Mr. Obama convened a task force on advanced manufacturing and steered federal money toward research hubs, which supported the development of robotics and biofabrication, among other technologies.

Mr. Trump’s approach, by contrast, has largely focused on saving legacy sectors whose workforces have been hurt by globalization, automation and innovation.

Especially when it comes to energy production, coal is a loser. It doesn’t matter how much of it we have, or how much Trump ridiculously believes is being “scrubbed clean” by miners, it is — ironically — going the way of the dinosaur. It is being replaced by renewable energy production, which has driven job growth in the energy sector for many years now as coal has lost it. Trump might as well try to bring back horse and buggy production.

And there is good reason for this. Coal is being left behind because using it for energy production produces massive negative externalities. It causes all manner of health problems and environmental destruction that can be reduced or nearly eliminated through the use of newer technologies. It’s a win-win for everyone other than coal miners. But no one thought that we should stop producing automobiles in order to save the jobs of blacksmiths who made horseshoes.

Technology evolves. Economies evolve. That is how it is, how it should be, and how it can’t possibly be otherwise. If you want to put policies in place to help those who are dislocated from their jobs to retrain them for other careers, great. That’s a terrific idea. But you cannot stop progress, you can only lose out to other countries. Someone is going to develop the next-generation energy technologies and dominate those markets. It can only be us if we look forward, not backward.

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